Harris CapRock’s April disqualification from a competition to provide managed satellite solutions to U.S. government customers under the Future Comsatcom Services Acquisition (FCSA) Custom Satcom Solutions (CS2) program came as a big surprise to many. After all, the CS2 program encompasses capabilities that for years have been the bread and butter of Harris CapRock’s legacy companies.
A stunned Harris CapRock initially protested to the U.S. Government Accountability Office, but withdrew its challenge shortly thereafter, opting instead to try and work with the companies that ultimately were selected for the $2.6 billion CS2 program. Among those that ultimately qualified for CS2 work wasGeneral, the government services division of satellite operator Intelsat. The two haven’t always gotten along: Harris CapRock was among several companies that publicly accused Intelsat of manipulating bandwidth prices to help secure a large U.S. Navy contract for its government services subsidiary.
That’s all in the past, said David Cavossa, primarily because Harris CapRock deals with the parent company Intelsat rather than subsidiary Intelsat General, which also is a direct competitor.
Cavossa spoke recently with SpaceNews Editor Warren Ferster.
The FCSA C2 program is right in your wheelhouse and yet you were disqualified as a prime. What happened?
We made a few mistakes on the proposal. We don’t agree with all of the reasons that we were disqualified, and that’s why we protested. But we also made mistakes and at the end of the day, after we went through the protest process, we saw how the government responded and we didn’t think there was anything left to delay, so we just moved on.
What specific points did you protest?
To provide an example, one criterion they hit us on was portability. It’s the ability to port capacity from one part of your fleet or one part of your service to a different part of the world with little notice. They said, “You wrote that you have all this experience with portability but when we look back in the contract files we can’t find any.”
And you in fact have this capability?
We’ve had the Marine Corps contract for about 10 years — it’s built on portability. We support the Marine Corps today with somewhere in the range of 200-plus megahertz of bandwidth. Let’s just say they’re using it in the United States, and they call us and say there was an earthquake and they need 50 megahertz over Taiwan tomorrow. As part of the contract, we have to port service to that other part of the world within 48 hours. We’ve been doing that for 10 years. But it’s all done without engineering change proposals and without contract modifications. That was one of the areas we protested because we got a ding against us saying we didn’t have any portability experience, and we’ve been doing it nonstop for the last 10 years. But when you go back into the contract files, there weren’t 100 engineering change proposals.
Is there anything to the rumor that Harris CapRock exceeded the proposal page limit?
We had a problem with the page limit. And in the mad dash to get it to the 50-page limit — I’ll take responsibility right off the bat — we cut a couple of things that should have not been cut from the proposal.
Now that you’ve withdrawn your protest, what’s your strategy for winning some of that business?
We’ve become friends with a lot of people we weren’t friends with before in the industry. We’re now in talks with all of the eight CS2 large business contract holders and the four small business contract holders. We just won our first small business CS2 task order. We subbed to AIS Engineering and AIS won.
So you don’t see any negative impact of not being able to compete as a prime?
It’s a five-year contract. They’re going to start recompeting CS2 in three years. And in the meantime we’re going to be tight with as many prime contractors as possible. We’ll hopefully win more business as a result because we’ll be able to bring business to some of these large primes that they didn’t have before. I have to look at the bright side; otherwise I can just throw up my hands and go, “Oh, we’re done, we can’t do this anymore.” That’s not the case.
Intelsat General won one of the FCSA CS2 awards. Are they among your new friends?
I would say Intelsat corporate is among our new friends but not necessarily Intelsat General, although we have a better relationship with them today than we did in the past. [Intelsat Chief Executive] Dave McGlade moved us from having to buy through a competitor to having the ability to deal directly with Intelsat corporate, so our relationship in the last two years has gone from zero to 100. We just made a huge investment in Intelsat’s Epic project. That would not have happened under the old regime. So it’s a credit to them for listening to their customer.
You’ve said Harris CapRock is not completely sold on Ka-band for commercial customers. What about the government?
The government has made the decision to move to Ka-band. In some cases it’s going to take time, in others they already have Ka-band equipment in the field. We’re trying to decide where we’re going to play in the Ka-band space. We haven’t made any bets yet on the government side. Artel made a huge investment with Boeing a little while ago, so we’ve watched that. I don’t see us making an investment that big in Ka-band. We’re looking at other things now.
If the U.S. government has committed, why hedge?
There are definitely groups within the U.S. government that are moving toward Ka-band, but not everybody. The unmanned aerial system community doesn’t have Ka-band antennas. That’s the single largest bandwidth hog today. They’re going to be primarily using Ku-band for the foreseeable future. At some point in the future they’ll move to Ka-band, but it’s quite a ways out.
What about UHF?
That’s the pivot we’ve made. Everybody’s getting into Ka-band, and we pivoted, especially now because we’re part of Harris, to UHF, to narrow band.
Do you have a partnership with Intelsat, whose IS-27 satellite has a UHF payload geared toward U.S. government customers?
With Intelsat we’ve been negotiating for awhile. Nothing’s signed with Intelsat, but we signed a huge deal six months ago with Astrium Services of Europe. Harris CapRock is focused largely on the UHF needs of the international market. A sister division of Harris has primarily sold UHF radios in the U.S., but now they’re selling in Africa, the Middle East, Europe and Asia. Those customers can use those radios today for line-of-site communications but if they want to go beyond line of site over satellite they don’t have any capacity. And that’s the niche that we saw as an underdeveloped and underserved market.
FCSA gives the government more flexibility to contract directly with satellite operators than the previous bandwidth procurement vehicle. Has that hurt your business?
It’s forced us to focus more on end-to-end solutions because we can’t compete very well anymore for bandwidth-only deals. We fought that for years because it was such a large piece of our revenue but we also know at the end of the day that it’s good for the government when it can buy directly from the satellite operators.
How do you assess the government market with the wars winding down?
It’s still a good market to be in. What you’re going to see is a change in the types of requirements as we’ll transition from boots on the ground and very small aperture terminal networks to more airborne intelligence, surveillance and reconnaissance-type stuff. That’s why we’ve pivoted over the last two years away from just big government bandwidth deals to focusing more on the special operations and intelligence communities.
You expect to grow in the coming years. Where is that growth going to come from?
We did zero international business two years ago and we’re now closing international business. So that’s all net increase. Even if it’s $5 million, it’s still $5 million more than we had last year. We’re also supporting a lot more intelligence customers today and will continue to do more. Those will be the biggest growth areas for us.
Has the deployment of new and more-capable U.S. military-owned satellites impacted your business?
We made a huge investment years ago in X-band and we did a lot of business over the last three years, and that business is starting to slow down because Wideband Global Satcom is up there.